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I have my PPP loan, now what…

I have my PPP loan, now what…

As rules and regulations keep changing, we want to provide the guidance we currently have.  Just remember that the final regulations may be different.  In order to have a portion or all of your loan forgiven, you need to understand the documentation that will be required.  Each lending institution may have slightly different requirements or forms to complete, but this is what everyone should begin putting in their file.  Once the lending institution reviews your information and approves it for forgiveness, remember the SBA may audit this information for up to 10 years.  It is up to each company to prove why they qualified for the funds and that the funds were used for the required expenses for the loan to be forgiven.

Checklist to put in your SBA PPP Loan folder:

  1. Documentation as to how the company was affected.  This will vary based on each business.  The borrower needs to certify in good faith that “current economic uncertainty makes this loan request necessary to support the ongoing operations of the Applicant” and loan proceeds “will be used to retain workers and maintain payroll”.  You should add hard evidence such as financial statements showing a drop in sales, a drop in collections, business closure by state mandate, etc. 
  2. Worksheet showing how the loan amount for the PPP Loan was calculated, including the FTE number of employees
  3. Copies of signed loan agreements
  4. Document the date you receive funding and compute the end of the 8-week period in order to know when you need to have the funds spent.
  5. Document what the funds were specifically spent on (discussed in depth below) and keep copies in your folder of each expense being claimed such as payroll reports, mortgage payments, utility bills, etc.

What can I use my PPP Loan funds on for the forgiveness piece?  Generally, if you use the PPP Loan for following items, with 75% spent on payroll expenses and 25% the other items, you should qualify for forgiveness.  If your FTE drops during your 8-week period, please contact us as this may affect your forgiveness calculation.  Currently the regulations state that the expenses need to be incurred and paid during the 8-week period.  We are waiting on clarification as to the incurred portion as these expenses may need to be prorated.

  1. Payroll Expenses. The CARES Act defines payroll costs as Qualified Expenses.  For a business (as opposed to an independent contractor or sole proprietor), payroll costs are payments to employees that are
    a. salary, wages, commissions, or similar compensation (up to an annualized $100,000)
    b. cash tips or equivalent
    c. vacation, parental, family medical, or sick leave (excluding payments for emergency paid sick leave or expanded family and medical leaves)
    d. separation or dismissal pay
    e. group health insurance
    f. retirement benefits
    g. employer-paid state or local payroll tax (but not federal payroll tax)
  2. Mortgage Interest. The CARES Act defines any interest on indebtedness incurred in the ordinary course of business before February 15 that is a mortgage on real or personal property as a Qualified Expense. Principal payments or prepayments are excluded and therefore are not Qualified Expenses.
  3. Rent Payments. The CARES Act defines any payments of rent under a leasing agreement in force before February 15, 2020, as a Qualified Expense. The CARES Act does not disqualify rent paid to family members or an insider relationship among parties so long as the lease for the property was in force before February 15, 2020. There is no current SBA guidance on late payments of past-due rent or prepayments of future rent.
  4. Utilities. The CARES Act defines utilities as electricity, gas, water, telephone, or internet access for which service began before February 15, 2020, as expenses that qualify for loan forgiveness.

Sole proprietors and Independent Contractors without employees.  If you received a PPP Loan based on your business net profit, we recommend you write two checks to yourself during the 8-week period as payroll for the loan forgiveness.  The amount of the check should equal your monthly net profit computation.  The balance should pay for your rent and utilities.

Remember, the legislation is still a moving target, but you need to make sure you are tracking the funds in detail and keeping copies of the receipts for the money spent.  Should you have additional questions we are here to assist you the best we can.

Stay Safe

The Davis, Nagy & Company Team

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COVID-19 Work Refusals: Information for Employers

During this unprecedented time, many employers have been forced to lay off employees, in response to stay-at-home orders, social distancing restrictions, lack of available work, and concerns about contracting COVID-19. In response, the federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provided expanded unemployment benefits to impacted individuals. The CARES Act provides additional weekly supplement payments, additional weeks of benefits, and a new program, Pandemic Unemployment Assistance, for those who traditionally have not qualified for unemployment benefits.

As employers begin reopening their doors to a “new normal,” in compliance with the Responsible RestartOhio requirements, many employees are expected to return to their previous employment. Ohio law prohibits individuals from receiving unemployment benefits if they refuse to accept offers of suitable work, or quit work, without good cause.

If you have employees who refuse to return to work or quit work, it’s important that you let the Ohio Department of Job and Family Services (ODJFS) know so we can make accurate eligibility determinations.

To report these occurrences, please visit and click on “Report COVID-19 Work Refusals.” This will take you to a web page to report these employees for investigation by ODJFS. Based on an individual examination of the facts from both parties, our claims examiners will then determine whether good cause exists for the individuals in question to continue receiving unemployment benefits.

Next week, the full policy that ODJFS will use to determine individuals’ continued eligibility for unemployment benefits after refusing to return to work will be posted here: This policy will underscore the presumption that if an individual’s job is available for them to work again, they will not be eligible for unemployment benefits.

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Important COVID-19 Updates – 03/28/2020

March 27, 2020

To our Valued Clients:

So much has changed in the week since we last reached out to you.  We hope that you are all staying healthy.  As you may have heard, Congress has passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act.  It contains many programs for both individuals and small businesses, and we wanted to make you aware of some of the provisions.

Individual relief includes:

  • There will be a one-time tax rebate check of $1,200 per individual and $500 per child.  There are no earned income requirements, and the full rebate is available for those with incomes at or below $75,000 for individuals, $112,500 for head of household, and $150,000 for married couples.
    • Above these income levels, the benefit is phased out with a $5 reduction for every $100 over these limits that is earned.  The rebate completely phases out at $99,000 for single filers, $146,500 for head of household, and $198,000 for joint filers with no children.
    • The IRS will be using direct deposit whenever possible.
  • Expanded unemployment benefits –
    • The federal government will cover the cost of additional benefits of up to $600 per week through July and providing for an additional 13 weeks of regular benefits beyond the normal 26 weeks.
    • The benefits would be available to workers who are unemployed due to their own illness, illness in a family member, the necessity to quarantine, job loss because of the virus, and staying home to take care of a child whose school or child care is closed because of the virus. It excludes those who can telework for pay, or who are already receiving paid sick leave or other paid leave benefits.
  • Student loan payments are deferred on all federal owned student loans.  This includes both principal and interest through September 30, 2020, without penalty.
    • For the remainder of 2020, employers can repay up to $5,250 of an employee’s student loans without that payment counting toward the employee’s taxable income.
  • Individuals can deduct up to $300 in cash contributions in 2020, regardless of whether they itemize their deductions.
  • Required minimum distributions from retirement plans are waived for 2020.
    • Individuals who have experienced adverse financial consequences as a result of COVID-19 are able to make withdrawals of up to $100,000 from their retirement funds without having to pay the 10% penalty normally incurred for individuals under 59 ½.
    • Loans from certain retirement plans will be allowed for those experiencing adverse financial consequences so that their funds can remain invested and benefit from market growth.

Business relief includes:

  • The Paycheck Protection Program, operated through the SBA’s 7(a) loan program, would provide for loans of up to 2.5 times the employer’s average monthly payroll at a maximum interest rate of 4%.
    • The portion of the loan used to keep employees on payroll, make rent or mortgage payments, utilities, insurance, or certain other costs during an 8-week period beginning on the loan date, would be forgiven on June 30th.
    • Amounts not forgiven would convert to a 10-year loan.
  • Employers that have closed or have suffered economic hardship and continue to pay employees that are on leave may be eligible for a 50% credit on up to $10,000 of wages paid.
  • Employers and self-employed individuals can defer payment of payroll taxes incurred during 2020.  Half would be paid by the end of 2021, and half by the end of 2022.
  • The loss limitation for pass-through businesses is modified, allowing them to deduct excess business losses.  In addition, losses from 2018, 2019, and 2020 can be carried back to the previous 5 years, creating refunds.
  • The SBA will pay all principal, interest, and fees on all existing SBA loans for 6 months.

As you may know, the deadline for filing and paying federal taxes due April 15, 2020 has been pushed back to July 15, 2020.  We have received some clarification on a few related items this week.  First, the extension is for returns and payments due 4/15/20 and includes any first quarter estimates due.  Please note that it does not include the second quarter estimate due 6/15/20.  So, your second quarter estimate will have a due date earlier than your first quarter estimate.

The Ohio legislature has passed a bill extending the state filing deadline to July 15 the Governor signed it yesterday.  We do not have clarity yet on local tax filings.

Our office remains closed through April 6th.  We are working remotely and have access to email and phones.  We are again encouraging you to mail your information to us, or request that we set up portal access for you to upload your documents.  If you would like access and are not already registered, please email [email protected] and we will create an account for you.  You are then able to upload your documents to us and we are able to upload tax returns back to you.

We have additional information regarding unemployment benefits, sick pay, and SBA loans on our website at

We appreciate your patience while we complete your returns.  We have had many additional obstacles this tax season and are working diligently to complete your returns as soon as possible.   Our thoughts are with you and your families.


Kathy and Sharon

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Covid-19/Coronavirus Information

To our Valued Clients:

We hope that you are all staying healthy during this very difficult time.  We are following developments from the CDC, IRS, and the State of Ohio in an effort to provide you with the information and services that you need.  Our first priority is the health and safety of our staff and clients.

As you may know, the deadline for filing and paying federal taxes due April 15, 2020 has been pushed back to July 15, 2020.  This means that you will have an additional 90 days to both file and pay any balances due.  No extension needs to be filed to receive this additional time.  As of yet, the State of Ohio and Ohio municipalities have not adjusted their filing deadlines.  So, at this point, the deadline for both payment and filing of these returns is April 15, 2020.  We are watching this situation closely and hope to have news of state and local extensions in the near future.

Due to the Governor’s stay at home ordered issued Sunday, we are closing the office for the next two weeks and will reassess the conditions on April 6th.  During this time, we will be working from home and have access to email as well as our office phone system.  If you have any questions, please give us a call or send us an email and we will respond as quickly as possible. We are encouraging you to use alternative ways of getting your information to us and receiving information from us.

  • We have an online client portal. If you are not already registered, please email [email protected] and we will create an account for you.  You are then able to upload your documents to us and we are able to upload tax returns back to you.
  • You can mail your documents to us.

We have additional information regarding unemployment benefits, sick pay, and SBA loans on our website at

Know that our thoughts are with you and your loved ones.


Kathy and Sharon

Important PDF documents to download: